Physical Asset Management
Physical Asset Management - Physical asset management is the practice of leveraging the physical assets of a company. Many companies have an internal department that does this, but in some cases an outside party is brought in to assist them.
For this to work, the team needs to know firsthand the assets of the company. To avoid duplication, it should indicate consumption and utility in the manufacturing process. This process is known as cost analysis because it extends life and reduces component failures such as theft and errors in the procurement of materials and equipment.
He can also assist management in tax planning and forecasting business decisions that can save the company millions of dollars.
For example, manufacturing suffers if machines break down frequently. It is okay if the machine you are using is already old. The company may try to fix this, but if the value is much higher than the value of the new one, they should probably try to sell it at a reasonable price and then use the money to buy a new one.
The same is true if the company has hundreds of stores and only a few of them are profitable. Since unprofitable businesses are not actually profitable, it would be a good idea to shut them down.
Many companies are now doing this because of rising fuel prices and the economic downturn. Instead of filing for bankruptcy, they would rather cut several thousand jobs and close stores. Some of the companies that have done this include Starbucks, American Airlines, JPMorgan, and many more. Another option is to merge some companies to stay afloat.
The bottom line is that managing physical assets gives companies an idea of what they already have. This will prevent them from missing out on opportunities that they could take when they introduced themselves.
One way to track company assets instead of manually doing it is to invest in asset management software. This will allow management to access it at any time via the company's intranet.
This can be done using bar-coding, as is done in a supermarket. This will allow the internal team to scan only the item, which will not only increase accuracy, but also save time on recurring inventories.
The physical asset management cycle consists of four phases.
The first is planning and purchasing. This is where the company sees what is available and then evaluates what is needed. They will look at different suppliers and then buy an affordable and efficient machine.
In the second step, those who use it must use the equipment to maximize its performance.
Third, it is called financial management. Here the company will see if the equipment is worth purchasing. This also includes ensuring that taxes, depreciation and other costs are accurate.
The fourth is elimination. If the device is old, it must be replaced in accordance with environmental regulations.
Companies will be able to practice effective physical asset management by following the life cycle. Sometimes a company has to make tough decisions to survive.